INTERVIEW - Bolivia To Tap Huge Lithium Deposit In Salt Lake

Date:28-Oct-08Country: BOLIVIAAuthor: Eduardo Garcia

Stretched between distant Andean peaks like a shimmering white carpet, the Uyuni salt lake is home to pink flamingos, 1,000-year-old cacti, rare hummingbirds and hotels built entirely from blocks of salt.

The lake may also hold one of the world's biggest deposits of lithium, and the government is investing $6 million in a pilot plant to help it figure out the best way to mine the soft alkali metal used in rechargeable batteries.

A pilot plant currently under construction in Uyuni, which is some 12,100 feet (3,700 meters) high in the Andes, might lead to the construction of a $250 million lithium facility, mining director Freddy Beltran told Reuters late on Friday.

Beltran said the extraction of lithium from Uyuni should have only minimal environmental impact, but activists are likely to raise concerns about the plan.

Leftist President Evo Morales laid the cornerstone of the pilot plant in May this year, which is scheduled to come on stream before the end of 2009.

Lithium batteries are used to power laptops, hybrid vehicles and cell phones, and demand could rocket if carmakers develop electric cars on a big scale.

The mining ministry says Uyuni, in the central Potosi region, holds at least 9 million tonnes of lithium.

Beltran said the progress of the plan will depend on the final investment, the success of the pilot project and demand for lithium products.

"We think we need an investment of approximately $250 million for the industrial plant. We are going to produce some 2,000 tonnes of lithium carbonate (per year), but that will depend."

Beltran said that a number of mining companies, chiefly France's Bollore and Japan's Mitsubishi and Sumitomo are pushing for contracts to set up lithium plants in Uyuni.

The companies want to mine lithium and export it as a raw material, said Beltran, whereas the Bolivian government wants to produce lithium hydroxide, lithium chloride, metallic lithium and even batteries in the Andean country so they can generate jobs and maximize revenue from the mineral.

Beltran said the government is in talks but not yet near reaching an agreement with any of the companies and that they need to "advance" their proposals if they want to tap into Uyuni's lithium reserves.

"Maybe the state could have (at some point) the capacity to invest the $250 million to build the plant," said Beltran.

Argentina, Chile and Bolivia are thought to have most of the world's lithium deposits.